TY 2015 Form 990

(A) Name and Title	(B) Average hours per week (list any hours for related organizations below dotted line)	(C) Position (do not check more than one box, unless person is both an officer and a director/trustee)	(E) Reportable compensation from related organizations (W- 2/1099-MISC)
(1) BRIAN NICHOLSON MD...................................................................... BOARD MEMBER/CHAIRMAN	2.0 ................. 48.0	X	X	507,085	19,599
(2) CHRISTOPHER ROSE MD...................................................................... BOARD MEMBER/VICE CHAIR	2.0 ................. 2.0	X	X	0	0
(3) COLEY DUNCAN MD...................................................................... BOARD MEMBER	2.0 ................. 2.0	X		0	0
(4) CYNTHIA BROWN MD...................................................................... BOARD MEMBER/SECRETARY	2.0 ................. 2.0	X	X	0	0
(5) DAVID BLANN MD...................................................................... BOARD MEMBER	2.0 ................. 48.0	X		744,526	19,621
(6) DAVID E MANGOLD MD...................................................................... BOARD MEMBER	2.0 ................. 2.0	X		0	0
(7) DAVID GRAY DO...................................................................... BOARD MEMBER	2.0 ................. 48.0	X		220,584	16,449
(8) FREDERICK HENSAL MD...................................................................... BOARD MEMBER	2.0 ................. 48.0	X		626,781	25,023
(9) IBRAHIM SHALABY MD...................................................................... BOARD MEMBER	2.0 ................. 48.0	X		811,119	32,353
(10) JUAN FITZ MD...................................................................... BOARD MEMBER	2.0 ................. 48.0	X		537,502	20,653
(11) KELLY KENSING MD...................................................................... BOARD MEMBER	2.0 ................. 2.0	X		0	0
(12) NILESH PATEL MD...................................................................... BOARD MEMBER	2.0 ................. 48.0	X		592,205	31,545
(13) SRINIVAS KADIYALA MD...................................................................... BOARD MEMBER	2.0 ................. 48.0	X		405,900	26,336
(14) SUSAN DEVINE MD...................................................................... BOARD MEMBER	2.0 ................. 2.0	X		0	0
(15) ANGELA FERGUSON MD...................................................................... BOARD MEMBER	2.0 ................. 48.0	X		221,128	14,652
(16) AMANDA BACKLUND MD...................................................................... BOARD MEMBER	2.0 ................. 48.0	X		367,776	13,145
(17) BILL ATKINSON MD...................................................................... BOARD MEMBER	2.0 ................. 48.0	X		780,618	25,311

- TIN:

SCHEDULE A
(Form 990 or 990EZ)

Department of the Treasury
Internal Revenue Service

Public Charity Status and Public Support

Complete if the organization is a section 501(c)(3) organization or a section 4947(a)(1) nonexempt charitable trust.
right arrow

Attach to Form 990 or Form 990-EZ.
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Information about Schedule A (Form 990 or 990-EZ) and its instructions is at www.irs.gov/form990.

OMB No. 1545-0047

2015

Open to Public
Inspection

Name of the organization

COVENANT ACO INC

Employer identification number

61-1573313

Part I

Reason for Public Charity Status (All organizations must complete this part.) See instructions.

The organization is not a private foundation because it is: (For lines 1 through 11, check only one box.)

A church, convention of churches, or association of churches described in section 170(b)(1)(A)(i).

A school described in section 170(b)(1)(A)(ii). (Attach Schedule E (Form 990 or 990-EZ))

A hospital or a cooperative hospital service organization described in section 170(b)(1)(A)(iii).

A medical research organization operated in conjunction with a hospital described in section 170(b)(1)(A)(iii). Enter the hospital's name, city, and state:

An organization operated for the benefit of a college or university owned or operated by a governmental unit described in section 170(b)(1)(A)(iv). (Complete Part II.)

A federal, state, or local government or governmental unit described in section 170(b)(1)(A)(v).

An organization that normally receives a substantial part of its support from a governmental unit or from the general public described in section 170(b)(1)(A)(vi). (Complete Part II.)

A community trust described in section 170(b)(1)(A)(vi). (Complete Part II.)

An organization that normally receives: (1) more than 331/3% of its support from contributions, membership fees, and gross receipts from activities related to its exempt functions—subject to certain exceptions, and (2) no more than 331/3% of its support from gross investment income and unrelated business taxable income (less section 511 tax) from businesses acquired by the organization after June 30, 1975. See section 509(a)(2). (Complete Part III.)

An organization organized and operated exclusively to test for public safety. See section 509(a)(4).

An organization organized and operated exclusively for the benefit of, to perform the functions of, or to carry out the purposes of one or more publicly supported organizations described in section 509(a)(1) or section 509(a)(2). See section 509(a)(3). Check the box in lines 11a through 11d that describes the type of supporting organization and complete lines 11e, 11f, and 11g.

Type I. A supporting organization operated, supervised, or controlled by its supported organization(s), typically by giving the supported organization(s) the power to regularly appoint or elect a majority of the directors or trustees of the supporting organization. You must complete Part IV, Sections A and B.

Type II. A supporting organization supervised or controlled in connection with its supported organization(s), by having control or management of the supporting organization vested in the same persons that control or manage the supported organization(s). You must complete Part IV, Sections A and C.

Type III functionally integrated. A supporting organization operated in connection with, and functionally integrated with, its supported organization(s) (see instructions). You must complete Part IV, Sections A, D, and E.

Type III non-functionally integrated. A supporting organization operated in connection with its supported organization(s) that is not functionally integrated. The organization generally must satisfy a distribution requirement and an attentiveness requirement (see instructions). You must complete Part IV, Sections A and D, and Part V.

Check this box if the organization received a written determination from the IRS that it is a Type I, Type II, Type III functionally integrated, or Type III non-functionally integrated supporting organization.

Enter the number of supported organizations .............. 1

Provide the following information about the supported organization(s).

(i)Name of supported organization	(ii) EIN	(iii) Type of organization (described on lines 1- 9 above (see instructions))	(iv) Is the organization listed in your governing document?		(v) Amount of monetary support (see instructions)	(vi) Amount of other support (see instructions)
(i)Name of supported organization	(ii) EIN		Yes	No	(v) Amount of monetary support (see instructions)	(vi) Amount of other support (see instructions)
(A) COVENANT HEALTH SYSTEM	752765566	3	Yes		0	0

Total 1					0	0

For Paperwork Reduction Act Notice, see the Instructions for
Form 990 or 990-EZ.

Cat. No. 11285F

Schedule A (Form 990 or 990-EZ) 2015

Page 2

Part II

Support Schedule for Organizations Described in Sections 170(b)(1)(A)(iv) and 170(b)(1)(A)(vi)
(Complete only if you checked the box on line 5, 7, or 8 of Part I or if the organization failed to qualify under Part III. If the organization fails to qualify under the tests listed below, please complete Part III.)

Section A. Public Support

Calendar year (or fiscal year beginning in)		(a) 2011	(b) 2012	(c) 2013	(d) 2014	(e) 2015	(f) Total
1	Gifts, grants, contributions, and membership fees received. (Do not include any unusual grants.) ....
2	Tax revenues levied for the organization's benefit and either paid to or expended on its behalf.......
3	The value of services or facilities furnished by a governmental unit to the organization without charge..
4	Total. Add lines 1 through 3
5	The portion of total contributions by each person (other than a governmental unit or publicly supported organization) included on line 1 that exceeds 2% of the amount shown on line 11, column (f)..
6	Public support. Subtract line 5 from line 4.

Section B. Total Support

Calendar year (or fiscal year beginning in)		(a) 2011	(b) 2012	(c) 2013	(d) 2014	(e) 2015	(f) Total
7	Amounts from line 4..
8	Gross income from interest, dividends, payments received on securities loans, rents, royalties and income from similar sources...
9	Net income from unrelated business activities, whether or not the business is regularly carried on..
10	Other income. Do not include gain or loss from the sale of capital assets (Explain in Part VI.)..
11	Total support. Add lines 7 through 10.

Gross receipts from related activities, etc. (see instructions) ..................

First five years. If the Form 990 is for the organization's first, second, third, fourth, or fifth tax year as a section 501(c)(3) organization, check this box and stop here........................................ right arrow

Section C. Computation of Public Support Percentage

Public support percentage for 2015 (line 6, column (f) divided by line 11, column (f)) .........

Public support percentage for 2014 Schedule A, Part II, line 14 ...............

16a

33 1/3% support test—2015. If the organization did not check the box on line 13, and line 14 is 33 1/3% or more, check this box
and stop here. The organization qualifies as a publicly supported organization ....................... right arrow

33 1/3% support test—2014. If the organization did not check a box on line 13 or 16a, and line 15 is 33 1/3% or more, check this
box and stop here. The organization qualifies as a publicly supported organization ..................... right arrow

17a

10%-facts-and-circumstances test—2015. If the organization did not check a box on line 13, 16a, or 16b, and line 14
is 10% or more, and if the organization meets the facts-and-circumstances test, check this box and stop here. Explain
in Part VI how the organization meets the "facts-and-circumstances" test. The organization qualifies as a publicly supported
organization ..................................................... right arrow

10%-facts-and-circumstances test—2014. If the organization did not check a box on line 13, 16a, 16b, or 17a, and line
15 is 10% or more, and if the organization meets the "facts-and-circumstances" test, check this box and stop here.
Explain in Part VI how the organization meets the "facts-and-circumstances" test. The organization qualifies as a publicly
supported organization ................................................ right arrow

Private foundation. If the organization did not check a box on line 13, 16a, 16b, 17a, or 17b, check this box and see
instructions ..................................................... right arrow

Schedule A (Form 990 or 990-EZ) 2015

Page 3

Part III

Support Schedule for Organizations Described in Section 509(a)(2)
(Complete only if you checked the box on line 9 of Part I or if the organization failed to qualify under Part II. If the organization fails to qualify under the tests listed below, please complete Part II.)

Section A. Public Support

Calendar year (or fiscal year beginning in)		(a) 2011	(b) 2012	(c) 2013	(d) 2014	(e) 2015	(f) Total
1	Gifts, grants, contributions, and membership fees received. (Do not include any "unusual grants.") .
2	Gross receipts from admissions, merchandise sold or services performed, or facilities furnished in any activity that is related to the organization's tax-exempt purpose......
3	Gross receipts from activities that are not an unrelated trade or business under section 513...
4	Tax revenues levied for the organization's benefit and either paid to or expended on its behalf...
5	The value of services or facilities furnished by a governmental unit to the organization without charge..
6	Total. Add lines 1 through 5.
7a	Amounts included on lines 1, 2, and 3 received from disqualified persons...
b	Amounts included on lines 2 and 3 received from other than disqualified persons that exceed the greater of $5,000 or 1% of the amount on line 13 for the year.
c	Add lines 7a and 7b..
8	Public support. (Subtract line 7c from line 6.)

Section B. Total Support

Calendar year (or fiscal year beginning in)		(a) 2011	(b) 2012	(c) 2013	(d) 2014	(e) 2015	(f) Total
9	Amounts from line 6...
10a	Gross income from interest, dividends, payments received on securities loans, rents, royalties and income from similar sources..
b	Unrelated business taxable income (less section 511 taxes) from businesses acquired after June 30, 1975.
c	Add lines 10a and 10b.
11	Net income from unrelated business activities not included in line 10b, whether or not the business is regularly carried on.
12	Other income. Do not include gain or loss from the sale of capital assets (Explain in Part VI.) ..
13	Total support. (Add lines 9, 10c, 11, and 12.)..

First five years. If the Form 990 is for the organization's first, second, third, fourth, or fifth tax year as a section 501(c)(3) organization,
check this box and stop here............................................. right arrow

Section C. Computation of Public Support Percentage

Public support percentage for 2015 (line 8, column (f) divided by line 13, column (f)) .........

Public support percentage from 2014 Schedule A, Part III, line 15 ...............

Section D. Computation of Investment Income Percentage

Investment income percentage for 2015 (line 10c, column (f) divided by line 13, column (f)) ......

Investment income percentage from 2014 Schedule A, Part III, line 17 .............

19a

331/3% support tests—2015. If the organization did not check the box on line 14, and line 15 is more than 33 1/3%, and line 17 is not more than 33 1/3%, check this box and stop here. The organization qualifies as a publicly supported organization ....... right arrow

33 1/3% support tests—2014. If the organization did not check a box on line 14 or line 19a, and line 16 is more than 33 1/3% and line 18 is not more than 33 1/3%, check this box and stop here. The organization qualifies as a publicly supported organization .... right arrow

Private foundation. If the organization did not check a box on line 14, 19a, or 19b, check this box and see instructions .... right arrow

Schedule A (Form 990 or 990-EZ) 2015

Page 4

Part IV

Supporting Organizations

(Complete only if you checked a box on line 11 of Part I. If you checked 11a of Part I, complete Sections A and B. If you checked 11b of Part I, complete Sections A and C. If you checked 11c of Part I, complete Sections A, D, and E. If you checked 11d of Part I, complete Sections A and D, and complete Part V.)

Section A. All Supporting Organizations

Yes

Are all of the organization’s supported organizations listed by name in the organization’s governing documents?
If "No," describe in Part VI how the supported organizations are designated. If designated by class or purpose,
describe the designation. If historic and continuing relationship, explain.

Yes

Did the organization have any supported organization that does not have an IRS determination of status under section 509(a)(1) or (2)? If "Yes," explain in Part VI how the organization determined that the supported organization was described in section 509(a)(1) or (2).

Did the organization have a supported organization described in section 501(c)(4), (5), or (6)? If "Yes," answer (b) and (c) below.

Did the organization confirm that each supported organization qualified under section 501(c)(4), (5), or (6) and satisfied the public support tests under section 509(a)(2)? If "Yes," describe in Part VI when and how the organization made the determination.

Did the organization ensure that all support to such organizations was used exclusively for section 170(c)(2)(B) purposes? If "Yes," explain in Part VI what controls the organization put in place to ensure such use.

Was any supported organization not organized in the United States ("foreign supported organization")? If “Yes” and if you checked 11a or 11b in Part I, answer (b) and (c) below.

Did the organization have ultimate control and discretion in deciding whether to make grants to the foreign supported organization? If “Yes,” describe in Part VI how the organization had such control and discretion despite being controlled or supervised by or in connection with its supported organizations.

Did the organization support any foreign supported organization that does not have an IRS determination under sections 501(c)(3) and 509(a)(1) or (2)? If “Yes,” explain in Part VI what controls the organization used to ensure that all support to the foreign supported organization was used exclusively for section 170(c)(2)(B) purposes.

Did the organization add, substitute, or remove any supported organizations during the tax year? If “Yes,” answer (b) and (c) below (if applicable). Also, provide detail in Part VI, including (i) the names and EIN numbers of the supported organizations added, substituted, or removed; (ii) the reasons for each such action; (iii) the authority under the organization's organizing document authorizing such action; and (iv) how the action was accomplished (such as by amendment to the organizing document).

Type I or Type II only. Was any added or substituted supported organization part of a class already designated in the organization's organizing document?

Substitutions only. Was the substitution the result of an event beyond the organization's control?

Did the organization provide support (whether in the form of grants or the provision of services or facilities) to anyone other than (i) its supported organizations, (ii) individuals that are part of the charitable class benefited by one or more of its supported organizations, or (iii) other supporting organizations that also support or benefit one or more of the filing organization’s supported organizations? If “Yes,” provide detail in Part VI.

Did the organization provide a grant, loan, compensation, or other similar payment to a substantial contributor (defined in section 4958(c)(3)(C)), a family member of a substantial contributor, or a 35% controlled entity with regard to a substantial contributor? If “Yes,” complete Part I of Schedule L (Form 990 or 990-EZ) .

Did the organization make a loan to a disqualified person (as defined in section 4958) not described in line 7? If “Yes,” complete Part I of Schedule L (Form 990 or 990-EZ).

Was the organization controlled directly or indirectly at any time during the tax year by one or more disqualified persons as defined in section 4946 (other than foundation managers and organizations described in section 509(a)(1) or (2))? If “Yes,” provide detail in Part VI.

Did one or more disqualified persons (as defined in line 9a) hold a controlling interest in any entity in which the supporting organization had an interest? If “Yes,” provide detail in Part VI.

Did a disqualified person (as defined in line 9a) have an ownership interest in, or derive any personal benefit from, assets in which the supporting organization also had an interest? If “Yes,” provide detail in Part VI.

10a

Was the organization subject to the excess business holdings rules of section 4943 because of section 4943(f) (regarding certain Type II supporting organizations, and all Type III non-functionally integrated supporting organizations)? If “Yes,” answer line 10b below.

10a

Did the organization have any excess business holdings in the tax year? (Use Schedule C, Form 4720, to determine whether the organization had excess business holdings).

10b

Schedule A (Form 990 or 990-EZ) 2015

Page 5

Part IV

Supporting Organizations (continued)

Yes

Has the organization accepted a gift or contribution from any of the following persons?

A person who directly or indirectly controls, either alone or together with persons described in (b) and (c) below, the governing body of a supported organization?

11a

A family member of a person described in (a) above?

11b

A 35% controlled entity of a person described in (a) or (b) above? If “Yes” to a, b, or c, provide detail in Part VI.

11c

Section B. Type I Supporting Organizations

Yes

Did the directors, trustees, or membership of one or more supported organizations have the power to regularly appoint or elect at least a majority of the organization’s directors or trustees at all times during the tax year? If “No,” describe in Part VI how the supported organization(s) effectively operated, supervised, or controlled the organization’s activities. If the organization had more than one supported organization, describe how the powers to appoint and/or remove directors or trustees were allocated among the supported organizations and what conditions or restrictions, if any, applied to such powers during the tax year.

Yes

Did the organization operate for the benefit of any supported organization other than the supported organization(s) that operated, supervised, or controlled the supporting organization? If “Yes,” explain in Part VI how providing such benefit carried out the purposes of the supported organization(s) that operated, supervised or controlled the supporting organization.

Section C. Type II Supporting Organizations

Yes

Were a majority of the organization’s directors or trustees during the tax year also a majority of the directors or trustees of each of the organization’s supported organization(s)? If “No,” describe in Part VI how control or management of the supporting organization was vested in the same persons that controlled or managed the supported organization(s).

Section D. All Type III Supporting Organizations

Yes

Did the organization provide to each of its supported organizations, by the last day of the fifth month of the organization’s tax year, (i) a written notice describing the type and amount of support provided during the prior tax year, (ii) a copy of the Form 990 that was most recently filed as of the date of notification, and (iii) copies of the organization’s governing documents in effect on the date of notification, to the extent not previously provided?

Were any of the organization’s officers, directors, or trustees either (i) appointed or elected by the supported organization(s) or (ii) serving on the governing body of a supported organization? If "No," explain in Part VI how the organization maintained a close and continuous working relationship with the supported organization(s).

By reason of the relationship described in (2), did the organization’s supported organizations have a significant voice in the organization’s investment policies and in directing the use of the organization’s income or assets at all times during the tax year? If "Yes," describe in Part VI the role the organization’s supported organizations played in this regard.

Section E. Type III Functionally-Integrated Supporting Organizations

Check the box next to the method that the organization used to satisfy the Integral Part Test during the year (see instructions):

The organization satisfied the Activities Test. Complete line 2 below.

The organization is the parent of each of its supported organizations. Complete line 3 below.

The organization supported a governmental entity. Describe in Part VI how you supported a government entity (see instructions)

Activities Test. Answer (a) and (b) below.

Yes

Did substantially all of the organization’s activities during the tax year directly further the exempt purposes of the supported organization(s) to which the organization was responsive? If "Yes," then in Part VI identify those supported organizations and explain how these activities directly furthered their exempt purposes, how the organization was responsive to those supported organizations, and how the organization determined that these activities constituted substantially all of its activities.

Did the activities described in (a) constitute activities that, but for the organization’s involvement, one or more of the organization’s supported organization(s) would have been engaged in? If "Yes," explain in Part VI the reasons for the organization’s position that its supported organization(s) would have engaged in these activities but for the organization’s involvement.

Parent of Supported Organizations. Answer (a) and (b) below.

Did the organization have the power to regularly appoint or elect a majority of the officers, directors, or trustees of each of the supported organizations? Provide details in Part VI.

Did the organization exercise a substantial degree of direction over the policies, programs and activities of each of its supported organizations? If "Yes," describe in Part VI. the role played by the organization in this regard.

Schedule A (Form 990 or 990-EZ) 2015

Page 6

Part V

Type III Non-Functionally Integrated 509(a)(3) Supporting Organizations

Check here if the organization satisfied the Integral Part Test as a qualifying trust on Nov. 20, 1970. See instructions. All other Type III non-functionally integrated supporting organizations must complete Sections A through E.

	Section A - Adjusted Net Income		(A) Prior Year	(B) Current Year (optional)
1	Net short-term capital gain	1
2	Recoveries of prior-year distributions	2
3	Other gross income (see instructions)	3
4	Add lines 1 through 3	4
5	Depreciation and depletion	5
6	Portion of operating expenses paid or incurred for production or collection of gross income or for management, conservation, or maintenance of property held for production of income (see instructions)	6
7	Other expenses (see instructions)	7
8	Adjusted Net Income (subtract lines 5, 6 and 7 from line 4)	8

	Section B - Minimum Asset Amount		(A) Prior Year	(B) Current Year (optional)
1	Aggregate fair market value of all non-exempt-use assets (see instructions for short tax year or assets held for part of year):	1
a	Average monthly value of securities	1a
b	Average monthly cash balances	1b
c	Fair market value of other non-exempt-use assets	1c
d	Total (add lines 1a, 1b, and 1c)	1d
e	Discount claimed for blockage or other factors (explain in detail in Part VI):
2	Acquisition indebtedness applicable to non-exempt use assets	2
3	Subtract line 2 from line 1d	3
4	Cash deemed held for exempt use. Enter 1-1/2% of line 3 (for greater amount, see instructions).	4
5	Net value of non-exempt-use assets (subtract line 4 from line 3)	5
6	Multiply line 5 by .035	6
7	Recoveries of prior-year distributions	7
8	Minimum Asset Amount (add line 7 to line 6)	8

	Section C - Distributable Amount		Current Year
1	Adjusted net income for prior year (from Section A, line 8, Column A)	1
2	Enter 85% of line 1	2
3	Minimum asset amount for prior year (from Section B, line 8, Column A)	3
4	Enter greater of line 2 or line 3	4
5	Income tax imposed in prior year	5
6	Distributable Amount. Subtract line 5 from line 4, unless subject to emergency temporary reduction (see instructions)	6

Check here if the current year is the organization's first as a non-functionally-integrated Type III supporting organization (see instructions)

Schedule A (Form 990 or 990-EZ) 2015

Page 7

Part V

Type III Non-Functionally Integrated 509(a)(3) Supporting Organizations (continued)

Section D - Distributions		Current Year
1 Amounts paid to supported organizations to accomplish exempt purposes
2 Amounts paid to perform activity that directly furthers exempt purposes of supported organizations, in excess of income from activity
3 Administrative expenses paid to accomplish exempt purposes of supported organizations
4 Amounts paid to acquire exempt-use assets
5 Qualified set-aside amounts (prior IRS approval required)
6 Other distributions (describe in Part VI). See instructions
7Total annual distributions. Add lines 1 through 6.
8 Distributions to attentive supported organizations to which the organization is responsive (provide details in Part VI). See instructions
9 Distributable amount for 2015 from Section C, line 6
10 Line 8 amount divided by Line 9 amount

Section E - Distribution Allocations (see instructions)		(i) Excess Distributions	(ii) Underdistributions Pre-2015	(iii) Distributable Amount for 2015
1 Distributable amount for 2015 from Section C, line 6
2 Underdistributions, if any, for years prior to 2015 (reasonable cause required--see instructions)
3 Excess distributions carryover, if any, to 2015:
a
b
c
d From 2013.......
e From 2014.......
fTotal of lines 3a through e
g Applied to underdistributions of prior years
h Applied to 2015 distributable amount
i Carryover from 2010 not applied (see instructions)
j Remainder. Subtract lines 3g, 3h, and 3i from 3f.
4Distributions for 2015 from Section D, line 7:
$
a Applied to underdistributions of prior years
b Applied to 2015 distributable amount
c Remainder. Subtract lines 4a and 4b from 4.
5 Remaining underdistributions for years prior to 2015, if any. Subtract lines 3g and 4a from line 2 (if amount greater than zero, see instructions)
6 Remaining underdistributions for 2015. Subtract lines 3h and 4b from line 1 (if amount greater than zero, see instructions)
7 Excess distributions carryover to 2016. Add lines 3j and 4c.
8 Breakdown of line 7:
a
b
c Excess from 2013.......
d From 2014.......
e From 2015.......

Schedule A (Form 990 or 990-EZ) (2015)

Schedule A (Form 990 or 990-EZ) 2015

Page 8

Part VI

Supplemental Information. Provide the explanations required by Part II, line 10; Part II, line 17a or 17b; Part III, line 12; Part IV, Section A, lines 1, 2, 3b, 3c, 4b, 4c, 5a, 6, 9a, 9b, 9c, 11a, 11b, and 11c; Part IV, Section B, lines 1 and 2; Part IV, Section C, line 1; Part IV, Section D, lines 2 and 3; Part IV, Section E, lines 1c, 2a, 2b, 3a and 3b; Part V, line 1; Part V, Section B, line 1e; Part V Section D, lines 5, 6, and 8; and Part V, Section E, lines 2, 5, and 6. Also complete this part for any additional information. (See instructions).

Facts And Circumstances Test

Return Reference	Explanation
SCHEDULE A, PART VI	RELATIONSHIP WITH COVENANT HEALTH SYSTEM COVENANT ACO, INC. A TEXAS NONPROFIT CORPORATION ("COVENANT ACO"), IS A PHYSICIAN-GOVERNED ENTITY ORGANIZED TO PARTICIPATE AS AN ACCOUNTABLE CARE ORGANIZATION ("ACO") IN THE MEDICARE SHARED SAVINGS PROGRAM ("MSSP"), WHERE GROUPS OF DOCTORS AND OTHER HEALTH CARE PROVIDERS VOLUNTARILY WORK TOGETHER WITH MEDICARE TO GIVE HIGH QUALITY SERVICE TO MEDICARE FEE-FOR-SERVICE BENEFICIARIES. COVENANT ACO AIMS TO IMPROVE PATIENT OUTCOMES AND ENRICH THE HEALTHCARE EXPERIENCE BY PROVIDING BETTER CARE FOR INDIVIDUALS AND LOWERING HEALTHCARE EXPENSES.

Return Reference

Explanation

SCHEDULE A, PART VI

RELATIONSHIP WITH COVENANT HEALTH SYSTEM COVENANT ACO, INC. A TEXAS NONPROFIT CORPORATION ("COVENANT ACO"), IS A PHYSICIAN-GOVERNED ENTITY ORGANIZED TO PARTICIPATE AS AN ACCOUNTABLE CARE ORGANIZATION ("ACO") IN THE MEDICARE SHARED SAVINGS PROGRAM ("MSSP"), WHERE GROUPS OF DOCTORS AND OTHER HEALTH CARE PROVIDERS VOLUNTARILY WORK TOGETHER WITH MEDICARE TO GIVE HIGH QUALITY SERVICE TO MEDICARE FEE-FOR-SERVICE BENEFICIARIES. COVENANT ACO AIMS TO IMPROVE PATIENT OUTCOMES AND ENRICH THE HEALTHCARE EXPERIENCE BY PROVIDING BETTER CARE FOR INDIVIDUALS AND LOWERING HEALTHCARE EXPENSES.

Schedule A (Form 990 or 990-EZ) 2015

Additional Data

Software ID:
Software Version:

- TIN:

SCHEDULE D
(Form 990)

Department of the Treasury
Internal Revenue Service

Supplemental Financial Statements

Complete if the organization answered "Yes," on Form 990,
Part IV, line 6, 7, 8, 9, 10, 11a, 11b, 11c, 11d, 11e, 11f, 12a, or 12b.
SchDMd Bullet

Attach to Form 990.
Information about Schedule D (Form 990) and its instructions is at www.irs.gov/form990.

OMB No. 1545-0047

2015

Open to Public Inspection

Name of the organization

COVENANT ACO INC

Employer identification number

61-1573313

Part I

Organizations Maintaining Donor Advised Funds or Other Similar Funds or Accounts. Complete if the organization answered "Yes" on Form 990, Part IV, line 6.

			(a) Donor advised funds	(b) Funds and other accounts

1	Total number at end of year ....
2	Aggregate value of contributions to (during year)
3	Aggregate value of grants from (during year)
4	Aggregate value at end of year ....

Did the organization inform all donors and donor advisors in writing that the assets held in donor advised
funds are the organization's property, subject to the organization's exclusive legal control? ...........

Yes No

Did the organization inform all grantees, donors, and donor advisors in writing that grant funds can be
used only for charitable purposes and not for the benefit of the donor or donor advisor, or for any other purpose conferring impermissible private benefit? ............................

Yes No

Part II

Conservation Easements. Complete if the organization answered "Yes" on Form 990, Part IV, line 7.

Purpose(s) of conservation easements held by the organization (check all that apply).

Preservation of land for public use (e.g., recreation or education) Preservation of an historically important land area

Protection of natural habitat Preservation of a certified historic structure

Preservation of open space

Complete lines 2a through 2d if the organization held a qualified conservation contribution in the form of a conservation easement on the last day of the tax year.


a	Total number of conservation easements ......................	2a
b	Total acreage restricted by conservation easements ....................	2b
c	Number of conservation easements on a certified historic structure included in (a) .....	2c
d	Number of conservation easements included in (c) acquired after 8/17/06, and not on a historic structure listed in the National Register ...	2d

Number of conservation easements modified, transferred, released, extinguished, or terminated by the organization during the
tax year SchDMd Bullet

Number of states where property subject to conservation easement is located SchDMd Bullet

Does the organization have a written policy regarding the periodic monitoring, inspection, handling of violations, and enforcement of the conservation easements it holds? ............

Yes No

Staff and volunteer hours devoted to monitoring, inspecting, handling of violations, and enforcing conservation easements during the year
SchDMd Bullet

Amount of expenses incurred in monitoring, inspecting, handling of violations, and enforcing conservation easements during the year
SchDMd Bullet

Does each conservation easement reported on line 2(d) above satisfy the requirements of section 170(h)(4)(B)(i) and section 170(h)(4)(B)(ii)? .............................

Yes No

In Part XIII, describe how the organization reports conservation easements in its revenue and expense statement, and
balance sheet, and include, if applicable, the text of the footnote to the organization’s financial statements that describes
the organization’s accounting for conservation easements.

Part III

Organizations Maintaining Collections of Art, Historical Treasures, or Other Similar Assets.
Complete if the organization answered "Yes" on Form 990, Part IV, line 8.

If the organization elected, as permitted under SFAS 116 (ASC 958), not to report in its revenue statement and balance sheet works of art, historical treasures, or other similar assets held for public exhibition, education, or research in furtherance of public service, provide, in Part XIII, the text of the footnote to its financial statements that describes these items.

If the organization elected, as permitted under SFAS 116 (ASC 958), to report in its revenue statement and balance sheet works of art, historical treasures, or other similar assets held for public exhibition, education, or research in furtherance of public service, provide the following amounts relating to these items:

(i)

Revenue included on Form 990, Part VIII, line 1 ......................... SchDMd Bullet

(ii)

Assets included in Form 990, Part X ............................... SchDMd Bullet

If the organization received or held works of art, historical treasures, or other similar assets for financial gain, provide the
following amounts required to be reported under SFAS 116 (ASC 958) relating to these items:

Revenue included on Form 990, Part VIII, line 1 .......................... SchDMd Bullet

Assets included in Form 990, Part X ............................... SchDMd Bullet

For Paperwork Reduction Act Notice, see the Instructions for Form 990.

Cat. No. 52283D

Schedule D (Form 990) 2015

Page 2

Part III

Organizations Maintaining Collections of Art, Historical Treasures, or Other Similar Assets (continued)

Using the organization’s acquisition, accession, and other records, check any of the following that are a significant use of its collection items (check all that apply):

Public exhibition

Loan or exchange programs

Scholarly research

Other

Preservation for future generations

Provide a description of the organization’s collections and explain how they further the organization’s exempt purpose in
Part XIII.

During the year, did the organization solicit or receive donations of art, historical treasures or other similar
assets to be sold to raise funds rather than to be maintained as part of the organization’s collection?...

Yes No

Part IV

Escrow and Custodial Arrangements. Complete if the organization answered "Yes" on Form 990, Part IV, line 9, or reported an amount on Form 990, Part X, line 21.

Is the organization an agent, trustee, custodian or other intermediary for contributions or other assets not
included on Form 990, Part X? ....................................

Yes No


b	If "Yes," explain the arrangement in Part XIII and complete the following table:		Amount
c	Beginning balance .............................	1c
d	Additions during the year ............................	1d
e	Distributions during the year ..........................	1e
f	Ending balance ................................	1f

Did the organization include an amount on Form 990, Part X, line 21, for escrow or custodial account liability?

Yes No

If "Yes," explain the arrangement in Part XIII. Check here if the explanation has been provided in Part XIII ........

Part V

Endowment Funds. Complete if the organization answered "Yes" on Form 990, Part IV, line 10.

		(a)Current year	(b)Prior year	(c)Two years back	(d)Three years back	(e)Four years back

1a	Beginning of year balance ....
b	Contributions ...
c	Net investment earnings, gains, and losses
d	Grants or scholarships ...
e	Other expenditures for facilities and programs ...
f	Administrative expenses ....
g	End of year balance ......

Provide the estimated percentage of the current year end balance (line 1g, column (a)) held as:

Board designated or quasi-endowment SchDMd Bullet

Permanent endowment SchDMd Bullet

Temporarily restricted endowment SchDMd Bullet

The percentages on lines 2a, 2b, and 2c should equal 100%.

Are there endowment funds not in the possession of the organization that are held and administered for the
organization by:

Yes

(i) unrelated organizations .................

3a(i)

(ii) related organizations .................

3a(ii)

If "Yes" on 3a(ii), are the related organizations listed as required on Schedule R? .........

Describe in Part XIII the intended uses of the organization's endowment funds.

Part VI

Land, Buildings, and Equipment.
Complete if the organization answered 'Yes' on Form 990, Part IV, line 11a. See Form 990, Part X, line 10.

Description of property		(a) Cost or other basis (investment)	(b)Cost or other basis (other)	(c) Accumulated depreciation	(d) Book value

1a	Land ...
b	Buildings
c	Leasehold improvements
d	Equipment ...
e	Other ...
Total. Add lines 1a through 1e. (Column (d) must equal Form 990, Part X, column (B), line 10(c).)..

Schedule D (Form 990) 2015

Page 3

Part VII

InvestmentsOther Securities. Complete if the organization answered 'Yes' on Form 990, Part IV, line 11b. See Form 990, Part X, line 12.

(a) Description of security or category (including name of security)	(b)Book value	(c)Method of valuation: Cost or end-of-year market value
(1)Financial derivatives
(2)Closely-held equity interests
(3)Other
(A)
(B)
(C)
(D)
(E)
(F)
(G)
(H)
Total. (Column (b) must equal Form 990, Part X, col. (B) line 12.)

Part VIII

InvestmentsProgram Related. Complete if the organization answered 'Yes' on Form 990, Part IV, line 11c. See Form 990, Part X, line 13.

(a) Description of investment	(b) Book value	(c) Method of valuation: Cost or end-of-year market value

(1)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
(9)
Total. (Column (b) must equal Form 990, Part X, col.(B) line 13.)

Part IX

Other Assets. Complete if the organization answered 'Yes' on Form 990, Part IV, line 11d. See Form 990, Part X, line 15.

(a) Description				(b) Book value
(1) DUE FROM COV HEALTH PARTNERS				2,197,843
(1)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
(9)
Total. (Column (b) must equal Form 990, Part X, col.(B) line 15.)...........				2,197,843

Part X

Other Liabilities. Complete if the organization answered 'Yes' on Form 990, Part IV, line 11e or 11f. See Form 990, Part X, line 25.

1.(a) Description of liability	(b) Book value
(1) Federal income taxes	0

(2)
(3)
(4)
(5)
(6)
(7)
(8)
(9)
Total. (Column (b) must equal Form 990, Part X, col.(B) line 25.)	0
2. Liability for uncertain tax positions. In Part XIII, provide the text of the footnote to the organization's financial statements that reports the organization's liability for uncertain tax positions under FIN 48 (ASC 740). Check here if the text of the footnote has been provided in Part XIII

Schedule D (Form 990) 2015

Page 4

Part XI Reconciliation of Revenue per Audited Financial Statements With Revenue per Return Complete if the organization answered 'Yes' on Form 990, Part IV, line 12a.
1	Total revenue, gains, and other support per audited financial statements .......		1
2	Amounts included on line 1 but not on Form 990, Part VIII, line 12:
a	Net unrealized gains (losses) on investments ....	2a
b	Donated services and use of facilities .........	2b
c	Recoveries of prior year grants ...........	2c
d	Other (Describe in Part XIII.) ............	2d
e	Add lines 2a through 2d .....................		2e
3	Subtract line 2e from line 1..................		3
4	Amounts included on Form 990, Part VIII, line 12, but not on line 1:
a	Investment expenses not included on Form 990, Part VIII, line 7b .	4a
b	Other (Describe in Part XIII.) ...........	4b
c	Add lines 4a and 4b....................		4c
5	Total revenue. Add lines 3 and 4c. (This must equal Form 990, Part I, line 12.) ......		5

Part XII Reconciliation of Expenses per Audited Financial Statements With Expenses per Return. Complete if the organization answered 'Yes' on Form 990, Part IV, line 12a.
1	Total expenses and losses per audited financial statements ...........		1
2	Amounts included on line 1 but not on Form 990, Part IX, line 25:
a	Donated services and use of facilities .........	2a
b	Prior year adjustments ............	2b
c	Other losses ................	2c
d	Other (Describe in Part XIII.) ............	2d
e	Add lines 2a through 2d....................		2e
3	Subtract line 2e from line 1...................		3
4	Amounts included on Form 990, Part IX, line 25, but not on line 1:
a	Investment expenses not included on Form 990, Part VIII, line 7b ..	4a
b	Other (Describe in Part XIII.) ............	4b
c	Add lines 4a and 4b.....................		4c
5	Total expenses. Add lines 3 and 4c. (This must equal Form 990, Part I, line 18.) ......		5

Part XIII

Supplemental Information

Provide the descriptions required for Part II, lines 3, 5, and 9; Part III, lines 1a and 4; Part lV, lines 1b and 2b;
Part V, line 4; Part X, line 2; Part XI, lines 2d and 4b; and Part XII, lines 2d and 4b. Also complete this part to provide any additional information.

Return Reference	Explanation
SCHEDULE D, PART X, LINE 2	ASC 740 (FIN 48) FOOTNOTE ACCOUNTING STANDARDS CODIFICATION (ASC 740), INCOME TAXES, CLARIFIES THE ACCOUNTING FOR INCOME TAXES BY PRESCRIBING A MINIMUM RECOGNITION THRESHOLD THAT A TAX POSITION IS REQUIRED TO MEET BEFORE BEING RECOGNIZED IN THE FINANCIAL STATEMENTS. ASC 740 ALSO PROVIDES GUIDANCE ON DERECOGNITION, MEASUREMENT, CLASSIFICATION, INTEREST AND PENALTIES, DISCLOSURE, AND TRANSITION. THE GUIDANCE IS APPLICABLE TO PASS-THROUGH ENTITIES AND TAX-EXEMPT ORGANIZATIONS. NO SIGNIFICANT TAX LIABILITY FOR TAX BENEFITS, INTEREST OR PENALTIES WAS ACCRUED AT JUNE 30, 2016 OR 2015.

Return Reference

Explanation

SCHEDULE D, PART X, LINE 2

ASC 740 (FIN 48) FOOTNOTE ACCOUNTING STANDARDS CODIFICATION (ASC 740), INCOME TAXES, CLARIFIES THE ACCOUNTING FOR INCOME TAXES BY PRESCRIBING A MINIMUM RECOGNITION THRESHOLD THAT A TAX POSITION IS REQUIRED TO MEET BEFORE BEING RECOGNIZED IN THE FINANCIAL STATEMENTS. ASC 740 ALSO PROVIDES GUIDANCE ON DERECOGNITION, MEASUREMENT, CLASSIFICATION, INTEREST AND PENALTIES, DISCLOSURE, AND TRANSITION. THE GUIDANCE IS APPLICABLE TO PASS-THROUGH ENTITIES AND TAX-EXEMPT ORGANIZATIONS. NO SIGNIFICANT TAX LIABILITY FOR TAX BENEFITS, INTEREST OR PENALTIES WAS ACCRUED AT JUNE 30, 2016 OR 2015.

Schedule D (Form 990) 2015

Additional Data

Software ID:
Software Version:

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Schedule J
(Form 990)

Department of the Treasury
Internal Revenue Service

Compensation Information

For certain Officers, Directors, Trustees, Key Employees, and Highest
Compensated Employees
SchJMediumBullet

Complete if the organization answered "Yes" on Form 990, Part IV, line 23.
SchJMediumBullet

Attach to Form 990.
SchJMediumBullet

Information about Schedule J (Form 990) and its instructions is at www.irs.gov/form990.

OMB No. 1545-0047

2015

Open to Public Inspection

Name of the organization

COVENANT ACO INC

Employer identification number

61-1573313

Part I

Questions Regarding Compensation

Yes

Check the appropiate box(es) if the organization provided any of the following to or for a person listed on Form
990, Part VII, Section A, line 1a. Complete Part III to provide any relevant information regarding these items.

First-class or charter travel Housing allowance or residence for personal use

Travel for companions Payments for business use of personal residence

Tax idemnification and gross-up payments Health or social club dues or initiation fees

Discretionary spending account Personal services (e.g., maid, chauffeur, chef)

If any of the boxes in line 1a are checked, did the organization follow a written policy regarding payment or reimbursement or provision of all of the expenses described above? If "No," complete Part III to explain .........

Did the organization require substantiation prior to reimbursing or allowing expenses incurred by all
directors, trustees, officers, including the CEO/Executive Director, regarding the items checked in line 1a? ..

Indicate which, if any, of the following the filing organization used to establish the compensation of the
organization's CEO/Executive Director. Check all that apply. Do not check any boxes for methods
used by a related organization to establish compensation of the CEO/Executive Director, but explain in Part III.

Compensation committee Written employment contract

Independent compensation consultant Compensation survey or study

Form 990 of other organizations Approval by the board or compensation committee

During the year, did any person listed on Form 990, Part VII, Section A, line 1a with respect to the filing organization or a related organization:

Receive a severance payment or change-of-control payment? ................

Participate in, or receive payment from, a supplemental nonqualified retirement plan? .........

Yes

Participate in, or receive payment from, an equity-based compensation arrangement? .........

If "Yes" to any of lines 4a-c, list the persons and provide the applicable amounts for each item in Part III.

Only 501(c)(3), 501(c)(4), and 501(c)(29) organizations must complete lines 5-9.

For persons listed on Form 990, Part VII, Section A, line 1a, did the organization pay or accrue any
compensation contingent on the revenues of:

The organization? ...........................

Any related organization?

If "Yes," on line 5a or 5b, describe in Part III.

For persons listed on Form 990, Part VII, Section A, line 1a, did the organization pay or accrue any
compensation contingent on the net earnings of:

The organization?

Any related organization? .........................

If "Yes," on line 6a or 6b, describe in Part III.

For persons listed on Form 990, Part VII, Section A, line 1a, did the organization provide any non-fixed
payments not described in lines 5 and 6? If "Yes," describe in Part III ............

Were any amounts reported on Form 990, Part VII, paid or accured pursuant to a contract that was
subject to the initial contract exception described in Regulations section 53.4958-4(a)(3)? If "Yes," describe
in Part III .............................

If "Yes" on line 8, did the organization also follow the rebuttable presumption procedure described in Regulations section 53.4958-6(c)? .........................

For Paperwork Reduction Act Notice, see the Instructions for Form 990.

Cat. No. 50053T

Schedule J (Form 990) 2015

Page 2

Part II

Officers, Directors, Trustees, Key Employees, and Highest Compensated Employees. Use duplicate copies if additional space is needed.

For each individual whose compensation must be reported on Schedule J, report compensation from the organization on row (i) and from related organizations, described in the
instructions, on row (ii). Do not list any individuals that are not listed on Form 990, Part VII.
Note. The sum of columns (B)(i)-(iii) for each listed individual must equal the total amount of Form 990, Part VII, Section A, line 1a, applicable column (D) and (E) amounts for that individual.

(A) Name and Title		(B) Breakdown of W-2 and/or 1099-MISC compensation			(C) Retirement and other deferred compensation	(D) Nontaxable benefits	(E) Total of columns (B)(i)-(D)	(F) Compensation in column(B) reported as deferred on prior Form 990
(A) Name and Title		(i) Base compensation	(ii) Bonus & incentive compensation	(iii) Other reportable compensation	(C) Retirement and other deferred compensation	(D) Nontaxable benefits	(E) Total of columns (B)(i)-(D)
1BRIAN NICHOLSON MDBOARD MEMBER/CHAIRMAN	(i) (ii)	0 ------------- 384,952	0 ------------- 114,971	0 ------------- 7,162	0 ------------- 0	0 ------------- 19,599	0 ------------- 526,684	0 ------------- 0
2DAVID BLANN MDBOARD MEMBER	(i) (ii)	0 ------------- 573,930	0 ------------- 170,596	0 ------------- 0	0 ------------- 10,000	0 ------------- 9,621	0 ------------- 764,147	0 ------------- 0
3DAVID GRAY DOBOARD MEMBER	(i) (ii)	0 ------------- 201,560	0 ------------- 17,574	0 ------------- 1,450	0 ------------- 0	0 ------------- 16,449	0 ------------- 237,033	0 ------------- 0
4FREDERICK HENSAL MDBOARD MEMBER	(i) (ii)	0 ------------- 463,781	0 ------------- 162,840	0 ------------- 160	0 ------------- 10,000	0 ------------- 15,023	0 ------------- 651,804	0 ------------- 0
5IBRAHIM SHALABY MDBOARD MEMBER	(i) (ii)	0 ------------- 588,380	0 ------------- 214,219	0 ------------- 8,520	0 ------------- 10,000	0 ------------- 22,353	0 ------------- 843,472	0 ------------- 0
6JUAN FITZ MDBOARD MEMBER	(i) (ii)	0 ------------- 491,020	0 ------------- 23,594	0 ------------- 22,888	0 ------------- 10,000	0 ------------- 10,653	0 ------------- 558,155	0 ------------- 0
7NILESH PATEL MDBOARD MEMBER	(i) (ii)	0 ------------- 331,954	0 ------------- 255,697	0 ------------- 4,554	0 ------------- 10,000	0 ------------- 21,545	0 ------------- 623,750	0 ------------- 0
8SRINIVAS KADIYALA MDBOARD MEMBER	(i) (ii)	0 ------------- 321,576	0 ------------- 76,787	0 ------------- 7,537	0 ------------- 8,000	0 ------------- 18,336	0 ------------- 432,236	0 ------------- 0
9ANGELA FERGUSON MDBOARD MEMBER	(i) (ii)	0 ------------- 185,548	0 ------------- 29,215	0 ------------- 6,365	0 ------------- 8,000	0 ------------- 6,652	0 ------------- 235,780	0 ------------- 0
10AMANDA BACKLUND MDBOARD MEMBER	(i) (ii)	0 ------------- 192,605	0 ------------- 175,058	0 ------------- 113	0 ------------- 8,000	0 ------------- 5,145	0 ------------- 380,921	0 ------------- 0
11BILL ATKINSON MDBOARD MEMBER	(i) (ii)	0 ------------- 694,274	0 ------------- 55,632	0 ------------- 30,712	0 ------------- 10,000	0 ------------- 15,311	0 ------------- 805,929	0 ------------- 0
12SHAILI FELTON MDBOARD MEMBER	(i) (ii)	0 ------------- 177,403	0 ------------- 41,400	0 ------------- 2,812	0 ------------- 8,000	0 ------------- 321	0 ------------- 229,936	0 ------------- 0
13JOHN GRIGSONCEO	(i) (ii)	0 ------------- 448,362	0 ------------- 170,769	0 ------------- 60,373	0 ------------- 13,249	0 ------------- 16,127	0 ------------- 708,880	0 ------------- 0
14BRUCE LANEVP OF FINANCE (PART YEAR)	(i) (ii)	0 ------------- 222,309	0 ------------- 84,365	0 ------------- 24,644	0 ------------- 2,445	0 ------------- 23,580	0 ------------- 357,343	0 ------------- 0
15MICHAEL ROBERTSON MDCMO	(i) (ii)	0 ------------- 324,762	0 ------------- 131,582	0 ------------- 31,590	0 ------------- 8,632	0 ------------- 17,286	0 ------------- 513,852	0 ------------- 0

Schedule J (Form 990) 2015

Page 3

Part III

Supplemental Information

Provide the information, explanation, or descriptions required for Part I, lines 1a, 1b, 3, 4a, 4b, 4c, 5a, 5b, 6a, 6b, 7, and 8, and for Part II. Also complete this part for any additional information.

Return Reference

Explanation

SCHEDULE J, PART I, LINE 3

THE ORGANIZATIONS CHIEF EXECUTIVE OFFICER, JOHN GRIGSON, IS PAID BY ITS CORPORATE MEMBER, COVENANT HEALTH SYSTEM, AND IS DISCLOSED AS A PERSON PAID BY A RELATED ORGANIZATION. SEE SCHEDULE O FORM 990, PART VI, LINES 15A AND 15B FOR THE PROCESS THAT IS COMPLETED BY COVENANT HEALTH SYSTEM.

SCHEDULE J, PART I, LINE 4B

COVENANT ACO ADOPTED THE COVENANT MEDICAL GROUP DEFERRED COMPENSATION PLAN, IN ORDER TO PROVIDE SUPPLEMENTAL RETIREMENT INCOME BENEFITS FOR HIGHLY COMPENSATED PHYSICIAN EMPLOYEES THROUGH DEFERRAL OF SALARY, AND THROUGH COMPANY MATCHING CONTRIBUTIONS. THE BASIC DESIGN OF THE PLAN WAS AS FOLLOWS: MONIES WERE DEFERRED EITHER THROUGH EMPLOYER CONTRIBUTIONS, EMPLOYEE ELECTIVE PRE-TAX DEFERRAL OR BOTH INTO AN INDIVIDUAL ACCOUNT. THE PARTICIPANT WAS ALLOWED TO DIRECT INVESTMENT OF THE MONIES IN THE ACCOUNT AND THE RESULTING BALANCE UPON PAYOUT WAS THE PARTICIPANT'S PLAN BENEFIT. MATCHING CONTRIBUTIONS FOR PLAN YEARS BEGINNING ON AND AFTER JANUARY 1, 2002 WERE DISCONTINUED. NO INDIVIDUALS RECEIVED 457(F) PAYMENTS DURING THE YEAR.

Schedule J (Form 990) 2015

Additional Data

Software ID:
Software Version:

- TIN:

SCHEDULE O
(Form 990 or 990-EZ)

Department of the Treasury
Internal Revenue Service

Supplemental Information to Form 990 or 990-EZ

Complete to provide information for responses to specific questions on
Form 990 or 990-EZ or to provide any additional information.
MediumBullet

Attach to Form 990 or 990-EZ.
MediumBullet

Information about Schedule O (Form 990 or 990-EZ) and its instructions is at
www.irs.gov/form990.

OMB No. 1545-0047

2015

Open to Public
Inspection

Name of the organization

COVENANT ACO INC

Employer identification number

61-1573313

Return Reference	Explanation
FORM 990, PART I, LINE 1 AND PART III, LINE 1	ORGANIZATION'S MOST SIGNIFICANT ACTIVITIES COVENANT ACO, INC. A TEXAS NONPROFIT CORPORATION ("COVENANT ACO"), IS A PHYSICIAN-GOVERNED ENTITY ORGANIZED TO PARTICIPATE AS AN ACCOUNTABLE CARE ORGANIZATION ("ACO") IN THE MEDICARE SHARED SAVINGS PROGRAM ("MSSP"), WHERE GROUPS OF DOCTORS AND OTHER HEALTH CARE PROVIDERS VOLUNTARILY WORK TOGETHER WITH MEDICARE TO GIVE HIGH QUALITY SERVICE TO MEDICARE FEE-FOR SERVICE BENEFICIARIES. COVENANT ACO AIMS TO IMPROVE PATIENT OUTCOMES AND ENRICH THE HEALTHCARE EXPERIENCE BY PROVIDING BETTER CARE FOR INDIVIDUALS AND LOWERING HEALTHCARE EXPENSES.
FORM 990, PART III, LINE 4A	PROGRAM SERVICE ACCOMPLISHMENTS COVENANT ACO, INC. A TEXAS NONPROFIT CORPORATION ("COVENANT ACO"), IS A PHYSICIAN-GOVERNED ENTITY ORGANIZED TO PARTICIPATE AS AN ACCOUNTABLE CARE ORGANIZATION ("ACO") IN THE MEDICARE SHARED SAVINGS PROGRAM ("MSSP"), WHERE GROUPS OF DOCTORS AND OTHER HEALTH CARE PROVIDERS VOLUNTARILY WORK TOGETHER WITH MEDICARE TO GIVE HIGH QUALITY SERVICE TO MEDICARE FEE-FOR-SERVICE BENEFICIARIES. COVENANT ACO AIMS TO IMPROVE PATIENT OUTCOMES AND ENRICH THE HEALTHCARE EXPERIENCE BY PROVIDING BETTER CARE FOR INDIVIDUALS AND LOWERING HEALTHCARE EXPENSES.
FORM 990, PART V, LINE 1A	ST. JOSEPH HEALTH SYSTEM (SJHS) PAYS ALL VENDORS FOR SJH ENTITIES UNDER SJH AP SHARED SERVICES. THEREFORE, SJHS ISSUES FORM 1099-MISC UNDER ITS TAX ID. SJHS COMPLIES WITH BACKUP WITHHOLDING RULES FOR REPORTABLE PAYMENTS TO VENDORS. FORM 990, PART VI, LINE 6 DESCRIPTION OF CLASSES OF MEMBERS OR STOCKHOLDERS COVENANT HEALTH SYSTEM IS THE SOLE CORPORATE MEMBER OF COVENANT ACO.
FORM 990, PART VI, LINE 7A	DESCRIPTION OF CLASSES OF PERSONS AND THE NATURE OF THEIR RIGHTS THE CORPORATE MEMBER, COVENANT HEALTH SYSTEM, APPROVES THE ELECTION OF THE COVENANT ACO BOARD.
FORM 990, PART VI, LINE 7B	DESCR CLASSES OF PERSONS, DECISIONS REQ APPR & TYPE OF VOTING RIGHTS THE FOLLOWING ACTIONS ARE RESERVED TO COVENANT HEALTH SYSTEM AND SHALL NOT REQUIRE ANY PRIOR ACTION OR APPROVAL BY THE BOARD OF DIRECTORS OR THE INDIVIDUAL MEMBERS: (I) THE ADOPTION, AMENDMENT OR INTERPRETATION OF ANY STATEMENT OF MISSION, PHILOSOPHY, ROLE, OR PURPOSE OF THE CORPORATION; (II) ANY ALTERATION, AMENDMENT OR REPEAL OF BYLAWS OR ADOPTION OF NEW BYLAWS; (III) ANY AMENDMENT TO, OR RESTATEMENT OF, THE CORPORATION'S CERTIFICATE OF FORMATION; (IV) THE APPOINTMENT OR REMOVAL OF CORPORATE OFFICERS OF THE CORPORATION; (V) THE ACQUISITION, SALE, LEASE (WHETHER AS LESSOR OR LESSEE), MORTGAGE, PLEDGE, HYPOTHECATION, TRANSFER, OR OTHER ENCUMBRANCE OR ALIENATION OF PROPERTY OF THE CORPORATION; (VI) THE SALE, LEASE, MORTGAGE, OR OTHER TRANSFER OR ENCUMBRANCE OF THE REAL PROPERTY OF THE CORPORATION; (VII) ANY MERGER, ACQUISITION, CONSOLIDATION, REORGANIZATION OR DISSOLUTION OF THE CORPORATION; (VIII) BORROWING OR LENDING OF MONEY OR THE CREATION OF INDEBTEDNESS THROUGH THE GUARANTY OF ANOTHER'S DEBT OR SIMILAR ACTION; (IX) GIVING, SEEKING, OR ACCEPTING GRANTS OR DONATIONS THAT WOULD OBLIGATE THE CORPORATION TO EXPEND FUNDS AND/OR ASSUME RESPONSIBILITIES OUTSIDE THOSE CONTEMPLATED BY ITS STATED CHARITABLE PURPOSES; (X) SETTLEMENT OF CLAIMS OR LITIGATION; (XI) THE ESTABLISHMENT OR CHANGE OF THE CORPORATION'S FISCAL YEAR; (XII) CREATION, OWNERSHIP, OR ACQUISITION OF, OR AFFILIATION WITH, ANY OTHER ORGANIZATION; AND (XIII) ANY DETERMINATIONS WITH RESPECT TO INDEMNIFICATION OF DIRECTOR AND OFFICERS OF THE CORPORATION BYLAWS.
FORM 990, PART VI, LINE 11B	PROCESS USED BY MANAGEMENT AND/OR GOVERNING BODY TO REVIEW 990 THE FORM 990 WAS PREPARED BY THE FINANCE DEPARTMENT BASED ON INFORMATION RECEIVED FROM VARIOUS DEPARTMENTS OF THE ORGANIZATION AS APPLICABLE. THE FORM 990 WAS THEN REVIEWED BY AN OFFICER OF THE ORGANIZATION. A COPY OF THE FORM 990 FILING WAS DISTRIBUTED TO ALL VOTING MEMBERS OF THE BOARD FOR THE APRIL 2017 MEETING. DURING THE FINANCE COMMITTEE MEETING, MANAGEMENT PRESENTED AND DISCUSSED CERTAIN DISCLOSURES AND INFORMATION INCLUDED IN THE FORM 990. THE FINANCE COMMITTEE CHAIR THEN PROVIDES A SUMMARY AT THE FULL BOARD MEETING.
FORM 990, PART VI, LINE 12C	DESCR OF PROCESS TO MONITOR TRANSACTIONS FOR CONFLICTS OF INTEREST OFFICERS, TRUSTEES AND KEY EMPLOYEES ARE REQUIRED TO DISCLOSE THE EXISTENCE AND NATURE OF ANY ACTUAL, APPARENT, OR POTENTIAL CONFLICTS OF INTEREST HE/SHE MAY HAVE THAT MIGHT RESULT IN OR HAVE THE APPEARANCE OF A CONFLICT IN CONNECTION WITH THAT INDIVIDUAL SATISFYING THEIR FIDUCIARY OBLIGATIONS TO THE ORGANIZATION. DISCLOSURES SHALL BE MADE PROMPTLY ANY TIME AN ACTUAL, APPARENT OR POTENTIAL CONFLICT OF INTEREST ARISES AND BEFORE THE CONSUMMATION OF ANY CONTRACT, TRANSACTION OR ARRANGEMENT THAT IS THE SUBJECT OF THE POTENTIAL CONFLICT OF INTEREST. WITH GUIDANCE FROM THE ST. JOSEPH HEALTH SYSTEM CHIEF COMPLIANCE OFFICER (CCO), THE CHIEF EXECUTIVE AND/OR THE GOVERNING BOARD CHAIRPERSON, AS APPROPRIATE, CONSIDERS THE MATTER INITIALLY. IF THE MATTER CANNOT BE RESOLVED AT THAT LEVEL, THE MATTER IS ESCALATED TO THE CCO. THE CCO, IN CONSULTATION WITH THE ST. JOSEPH HEALTH SYSTEM GENERAL COUNSEL, REVIEWS THE MATTER AND PRESENTS RECOMMENDATIONS TO THE GOVERNING BOARD AND/OR BOARD COMMITTEE, AS APPROPRIATE, FOR DISCUSSION AND VOTE. THE INDIVIDUAL WHOSE POTENTIAL CONFLICT IS BEING REVIEWED MAY BE REQUESTED TO BE PRESENT DURING ANY MEETING IN WHICH THE BOARD OR BOARD COMMITTEE CONDUCTS ITS EVALUATION BUT SHALL BE EXCUSED FOR ANY DISCUSSION OR VOTE. ONCE ALL NECESSARY INFORMATION HAS BEEN OBTAINED, THE COMMITTEE CONDUCTS ITS EVALUATION AND FORWARDS ITS FINDINGS AND RECOMMENDATIONS TO THE SJHS CHIEF COMPLIANCE OFFICER. IF THE COMMITTEE DETERMINES AN UNRESOLVED CONFLICT OF INTEREST EXISTS, THE COMMITTEE WILL EVALUATE AND RECOMMEND CONFLICT MITIGATION STRATEGIES. THE SJHS CHIEF COMPLIANCE OFFICER, IN CONSULTATION WITH SJHS GENERAL COUNSEL, WILL REVIEW THE COMMITTEE FINDINGS, RECOMMENDATIONS, AND MITIGATION STRATEGIES, AND PRESENT RECOMMENDATIONS TO THE BOARD FOR DISCUSSION AND VOTE.
FORM 990, PART VI, LINES 15A & 15B	PROCESS USED TO DETERMINE COMPENSATION THE ORGANIZATION'S CHIEF EXECUTIVE OFFICER IS PAID BY ITS TAX EXEMPT PARENT, COVENANT HEALTH SYSTEM, AND IS DISCLOSED AS A PERSON PAID BY A RELATED ORGANIZATION. EXECUTIVE COMPENSATION IS APPROVED BY THE COVENANT HEALTH SYSTEM CONFLICTS AND COMPENSATION COMMITTEE, WHICH IS COMPRISED OF INDEPENDENT PERSONS. THE COMMITTEE REVIEWS COMPARABILITY DATA PREPARED FOR AND COMPILED BY THE ST.JOSEPH HEALTH SYSTEM WORKLIFE COMMITTEE, A COMMITTEE OF THE ST. JOSEPH HEALTH SYSTEM BOARD OF TRUSTEES COMPRISED OF INDEPENDENT MEMBERS. THE ST.JOSEPH HEALTH SYSTEM WORKLIFE COMMITTEE ACTS IN ACCORDANCE WITH A COMMITTEE CHARTER APPROVED BY THE ST. JOSEPH HEALTH SYSTEM BOARD OF TRUSTEES AND AN EXECUTIVE COMPENSATION PHILOSOPHY. THE CHARTER DIRECTS THE ST. JOSEPH HEALTH SYSTEM WORKLIFE COMMITTEE TO ADMINISTER THE EXECUTIVE COMPENSATION PROGRAM AND TO APPROVE PROGRAM CHANGES, AS NECESSARY, TO ENSURE ALIGNMENT WITH THE STATED PHILOSOPHY AND ENSURE CONTINUED COMPLIANCE WITH FEDERAL AND STATE REGULATIONS ON BEHALF OF THE ST. JOSEPH HEALTH SYSTEM BOARD OF TRUSTEES. OVERALL, THE PHILOSOPHY IS INTENDED TO REWARD A BROAD SPECTRUM OF HIGH ORGANIZATIONAL AND INDIVIDUAL PERFORMANCE EXPECTATIONS, AS WELL AS RETENTION OF KEY MANAGEMENT TALENT. THE EXECUTIVE COMPENSATION PHILOSOPHY DEFINES THE MARKET FOR ADMINISTERING COMPENSATION AS A COMPARABLE SET OF FOR PROFIT AND NOT-FOR-PROFIT HEALTH CARE DELIVERY SYSTEMS. ST. JOSEPH HEALTH SYSTEM PROVIDES COMPENSATION TO ITS EXECUTIVES IN THE FORM OF BASE SALARY, AN ANNUAL INCENTIVE PROGRAM, AND BENEFITS. TO ENSURE COMPENSATION PHILOSOPHY ADHERENCE AND GENERAL FAIR MARKET VALUE COMPENSATION, THE COMMITTEE REGULARLY REVIEWS INFORMATION FROM MULTIPLE SOURCES OF MARKET DATA AND ENGAGES LEGAL COUNSEL AND CONSULTING SUPPORT, AS NEEDED. THEY USE THIS INFORMATION TO SUPPORT ONGOING EFFECTIVENESS AND ADMINISTRATION OF THE PROGRAM. THE ST. JOSEPH HEALTH SYSTEM WORKLIFE COMMITTEE MEETS AT LEAST 3 TIMES A YEAR AND TAKES ACTION IN EXECUTIVE SESSION. THESE ACTIONS ARE DOCUMENTED IN DETAILED MINUTES AND APPROVED IN SUBSEQUENT MEETINGS. A FULL COMPENSATION REVIEW IS CONDUCTED ON A BIENNIAL BASIS AND THE LAST REVIEW WAS PERFORMED IN JUNE 2016. DURING THE YEAR, THE COVENANT HEALTH SYSTEM CONFLICTS AND COMPENSATION COMMITTEE REVIEWED AND APPROVED ANY CHANGES IN COMPENSATION FOR KEY EXECUTIVES PREDICATED ON THE ANALYSIS AND RECOMMENDATION BY AN INDEPENDENT THIRD PARTY CONSULTING FIRM WITH EXPERTISE IN HEALTHCARE EXECUTIVE COMPENSATION. IN ADDITION, ANNUAL INCENTIVE AWARDS ARE REVIEWED AND APPROVED PRIOR TO PAYMENT CONSISTENT WITH THE MOST RECENT COMPENSATION BIENNIAL REVIEW AND IN ACCORDANCE WITH THE PLAN DOCUMENT. THESE ACTIONS ARE DOCUMENTED IN DETAILED MINUTES WHICH ARE SUBSEQUENTLY APPROVED AT THE COMMITTEE MEETING.
FORM 990, PART VI, LINE 19	AVAIL OF GOV DOCS, CONFLICT OF INTEREST POLICY, & FIN SMTS TO GEN PUBLIC THE ORGANIZATION MAKES ITS GOVERNING DOCUMENTS, CONFLICT OF INTEREST POLICY AND FINANCIAL STATEMENTS AVAILABLE TO THE PUBLIC UPON REQUEST. THE SJHS COMMUNITY BENEFIT REPORTS, FINANCIAL REPORTS, AND PHILANTHROPY REPORTS ARE ALSO AVAILABLE ON THE SJHS INTERNET SITE.
FORM 990 PART IX LINE 11G	DESCRIPTION:MEMBER INCENTIVE FEES TOTAL FEES:1176939
FORM 990 PART IX LINE 11G	DESCRIPTION:PURCHASED SERVICES TOTAL FEES:574689

For Paperwork Reduction Act Notice, see the Instructions for Form 990 or 990-EZ.

Cat. No. 51056K

Schedule O (Form 990 or 990-EZ) 2015

Additional Data

Software ID:
Software Version:

- TIN:

SCHEDULE R
(Form 990)

Department of the Treasury
Internal Revenue Service

Related Organizations and Unrelated Partnerships

Complete if the organization answered "Yes" on Form 990, Part IV, line 33, 34, 35b, 36, or 37.
MediumBullet

Attach to Form 990.
MediumBullet

Information about Schedule R (Form 990) and its instructions is at www.irs.gov/form990.

OMB No. 1545-0047

2015

Open to Public Inspection

Name of the organization

COVENANT ACO INC

Employer identification number

61-1573313

Part I

Identification of Disregarded Entities Complete if the organization answered "Yes" on Form 990, Part IV, line 33.

(a) Name, address, and EIN (if applicable) of disregarded entity	(b) Primary activity	(c) Legal domicile (state or foreign country)	(d) Total income	(e) End-of-year assets	(f) Direct controlling entity

Part II

Identification of Related Tax-Exempt Organizations Complete if the organization answered "Yes" on Form 990, Part IV, line 34 because it had one or more related tax-exempt organizations during the tax year.

(a) Name, address, and EIN of related organization	(b) Primary activity	(c) Legal domicile (state or foreign country)	(d) Exempt Code section	(e) Public charity status (if section 501(c)(3))	(f) Direct controlling entity	(g) Section 512(b)(13) controlled entity?
(a) Name, address, and EIN of related organization	(b) Primary activity	(c) Legal domicile (state or foreign country)	(d) Exempt Code section	(e) Public charity status (if section 501(c)(3))	(f) Direct controlling entity	Yes	No
(1)COVENANT HEALTH NETWORK INC 3345 MICHELSON DRIVE STE 100 IRVINE,CA92612 46-1259908	HEALTHCARE	CA	501(C)(3)	11,III	SJHS	Yes
(2)COVENANT HEALTH SYSTEM 3615 19TH STREET LUBBOCK,TX79410 75-2765566	HEALTHCARE	TX	501(C)(3)	3	SJHS	Yes
(3)COVENANT HEALTH SYSTEM FOUNDATION 3623 22ND PLACE LUBBOCK,TX79410 75-2897026	HEALTHCARE	TX	501(C)(3)	7	CHS	Yes
(4)COVENANT MEDICAL GROUP 3420 22ND PLACE LUBBOCK,TX79410 75-2743883	HEALTHCARE	TX	501(C)(3)	3	CHS	Yes
(5)COVENANT HEALTH PARTNERS 3615 19TH STREET LUBBOCK,TX79410 46-3516417	HEALTHCARE	TX	501(C)(3)	11,I	CHS	Yes
(6)HMTS INC 1 HOAG DRIVE NEWPORT BEACH,CA92663 45-3583707	HEALTHCARE	CA	501(C)(3)	11,I	HMHP	Yes
(7)HOAG CHARITY SPORTS 330 PLACENTIA AVE NEWPORT BEACH,CA92663 45-2982422	SUPPORT	CA	501(C)(3)	7	HHF	Yes
(8)HOAG HOSPITAL FOUNDATION 330 PLACENTIA AVE NEWPORT BEACH,CA92663 95-3222343	FUNDRAISING	CA	501(C)(3)	7	HMHP	Yes
(9)HOAG MEMORIAL HOSPITAL PRESBYTERIAN 1 HOAG ROAD BOX 6100 NEWPORT BEACH,CA92663 95-1643327	HEALTHCARE	CA	501(C)(3)	3	CHN	Yes
(10)HOME CARE PARTNERS 1165 MONTGOMERY DR SANTA ROSA,CA95405 68-0318656	INACTIVE	CA	501(C)(3)	3	SRMH	Yes
(11)HOSPICE OF LUBBOCK 3702 21ST STREET LUBBOCK,TX79410 75-2133781	HEALTHCARE	TX	501(C)(3)	9	CHS	Yes
(12)LUBBOCK METHODIST HOSPITAL FOUNDATION 3615 19TH STREET LUBBOCK,TX79410 75-2220963	HEALTHCARE	TX	501(C)(3)	7	CHS	Yes
(13)METHODIST CHILDREN'S HOSPITAL 4015 22ND PLACE LUBBOCK,TX79410 75-2428911	HEALTHCARE	TX	501(C)(3)	3	CHS	Yes
(14)METHODIST HOSPITAL LEVELLAND 1900 COLLEGE AVENUE LEVELLAND,TX79336 75-2246348	HEALTHCARE	TX	501(C)(3)	3	CHS	Yes
(15)METHODIST HOSPITAL PLAINVIEW 2601 DIMMITT ROAD PLAINVIEW,TX79072 75-2426010	HEALTHCARE	TX	501(C)(3)	3	CHS	Yes
(16)MISSION HOSPITAL REGIONAL MEDICAL CTR 27700 MEDICAL CENTER ROAD MISSION VIEJO,CA92691 95-1643360	HEALTHCARE	CA	501(C)(3)	3	CHN	Yes
(17)QUEEN OF THE VALLEY MEDICAL CENTER 1000 TRANCAS STREET NAPA,CA94558 94-1243669	HEALTHCARE	CA	501(C)(3)	3	SJHS	Yes
(18)REDWOOD MEMORIAL FOUNDATION 3300 RENNER DRIVE FORTUNA,CA95540 94-2779313	HEALTHCARE	CA	501(C)(3)	7	RMH	Yes
(19)REDWOOD MEMORIAL HOSPITAL 3300 RENNER DRIVE FORTUNA,CA95540 94-1384665	HEALTHCARE	CA	501(C)(3)	3	SJHS	Yes
(20)SANTA ROSA MEMORIAL HOSPITAL 1165 MONTGOMERY DR SANTA ROSA,CA95405 94-1231005	HEALTHCARE	CA	501(C)(3)	3	SJHS	Yes
(21)SISTERS OF ST JOSEPH OF ORANGE 480 S BATAVIA ORANGE,CA92868 95-1643383	RELIGIOUS ORG	CA	501(C)(3)	1	NA		No
(22)SRM ALLIANCE HOSPITAL SERVICES (PVH) 400 NORTH MCDOWELL BLVD PETALUMA,CA94954 68-0395200	HEALTHCARE	CA	501(C)(3)	3	SRMH	Yes
(23)ST JOSEPH HEALTH MINISTRY 3345 MICHELSON DRIVE STE 100 IRVINE,CA92612 27-1666576	RELIGIOUS ORG	CA	501(C)(3)	1	SSJO		No
(24)ST JOSEPH HEALTH SYSTEM 3345 MICHELSON DRIVE STE 100 IRVINE,CA92612 95-3589356	HEALTHCARE	CA	501(C)(3)	11, I	SJHM		No
(25)ST JOSEPH HEALTH SYSTEM FOUNDATION 3345 MICHELSON DRIVE STE 100 IRVINE,CA92612 33-0143024	HEALTHCARE	CA	501(C)(3)	7	SJHS	Yes
(26)ST JOSEPH HOME CARE NETWORK 1111 SONOMA STE 308 SANTA ROSA,CA95405 68-0331084	HEALTHCARE	CA	501(C)(3)	9	SJHS	Yes
(27)ST JOSEPH HOSPITAL OF EUREKA 2700 DOLBEER STREET EUREKA,CA95501 94-1156596	HEALTHCARE	CA	501(C)(3)	3	SJHS	Yes
(28)ST JOSEPH HOSPITAL OF ORANGE 1100 WEST STEWART DRIVE ORANGE,CA92868 95-1643359	HEALTHCARE	CA	501(C)(3)	3	CHN	Yes
(29)ST JUDE HOSPITAL YORBA LINDA 200 WEST CENTER ST PROMENADE ANAHEIM,CA92805 33-0185031	HEALTHCARE	CA	501(C)(3)	3	SJHS	Yes
(30)ST JUDE HOSPITAL INC 101 EAST VALENCIA MESA DRIVE FULLERTON,CA92635 95-1643324	HEALTHCARE	CA	501(C)(3)	3	CHN	Yes
(31)ST MARY MEDICAL CENTER 18300 HIGHWAY 18 APPLE VALLEY,CA92307 95-1914489	HEALTHCARE	CA	501(C)(3)	3	CHN	Yes
(32)ST MARY OF THE PLAINS HOSPITAL FDN 4000 24TH STREET LUBBOCK,TX79410 75-1653181	HEALTHCARE	TX	501(C)(3)	7	CHS	Yes
(33)TALLER SAN JOSE 801 NORTH BROADWAY SANTA ANA,CA92701 59-3816355	WORK DEVELOPM	CA	501(C)(3)	2	SSJO	Yes

For Paperwork Reduction Act Notice, see the Instructions for Form 990.

Cat. No. 50135Y

Schedule R (Form 990) 2015

Page 2

Part III

Identification of Related Organizations Taxable as a Partnership Complete if the organization answered "Yes" on Form 990, Part IV, line 34 because it had one or more related organizations treated as a partnership during the tax year.

(a) Name, address, and EIN of related organization	(b) Primary activity	(c) Legal domicile (state or foreign country)	(d) Direct controlling entity	(e) Predominant income(related, unrelated, excluded from tax under sections 512-514)	(f) Share of total income	(g) Share of end-of-year assets	(h) Disproprtionate allocations?		(i) Code V-UBI amount in box 20 of Schedule K-1 (Form 1065)	(j) General or managing partner?
(a) Name, address, and EIN of related organization	(b) Primary activity	(c) Legal domicile (state or foreign country)	(d) Direct controlling entity		(f) Share of total income	(g) Share of end-of-year assets	Yes	No	(i) Code V-UBI amount in box 20 of Schedule K-1 (Form 1065)	Yes	No
(1) COVENANT LONG-TERM CARE LP 20-5477251	HEALTHCARE	TX	NA	N/A
(2) HERITAGE INVESTMENT GROUP	INVESTMENTS	CA	NA	N/A
(3) HOAG ORTHOPEDIC INSTITUTE	HEALTHCARE	CA	NA	N/A
(4) LUBBOCK SURGERY CENTER LTD	HEALTHCARE	TX	NA	N/A
(5) METHODIST DIAGNOSTIC IMAGING	HEALTHCARE	TX	NA	N/A
(6) MISSION AMBULATORY SURGICENTER	HEALTHCARE	CA	NA	N/A
(7) NEWPORT IMAGING CENTER	HEALTHCARE	CA	NA	N/A
(8) SHA LLC	HEALTHCARE	TX	NA	N/A
(9) ST JOSEPH PHYSICIAN VENTURES	REAL ESTATE	CA	NA	N/A
(10) ST JOSEPH HLTH SYS HOME CARE	HOME HEALTH	CA	NA	N/A
(11) ST JOSEPH HLTH SYS HOME HLTH	HOME HEALTH	CA	NA	N/A
(12) THE INNOVATION INSTITUTE	HEALTHCARE	CA	NA	N/A
(13) NORTH BAY ENDOSCOPY CENTER	HEALTHCARE	CA	NA	N/A
(14) MISSN VIEJO PHSCN PRTNRS I LLC 47-1559873	HEALTHCARE	CA	NA	N/A
(15) ADVANCED SURGERY INSTITUTE LLC 26-2299255	HEALTHCARE	CA	NA	N/A

Part IV

Identification of Related Organizations Taxable as a Corporation or Trust Complete if the organization answered "Yes" on Form 990, Part IV, line 34 because it had one or more related organizations treated as a corporation or trust during the tax year.

(a) Name, address, and EIN of related organization	(b) Primary activity	(c) Legal domicile (state or foreign country)	(d) Direct controlling entity	(e) Type of entity (C corp, S corp, or trust)	(f) Share of total income	(g) Share of end-of-year assets	(i) Section 512(b)(13) controlled entity?
(a) Name, address, and EIN of related organization	(b) Primary activity	(c) Legal domicile (state or foreign country)	(d) Direct controlling entity	(e) Type of entity (C corp, S corp, or trust)	(f) Share of total income	(g) Share of end-of-year assets	Yes	No
(1) AMERICAN UNITY GROUP LTD 90 PITTS BAY ROAD PEMBROKE HM08 BD	CAPTIVE INSURANCE	BD	NA	C-CORP
(2) COASTAL MANAGEMENT SERVICES ORGANIZATION 1 HOAG DRIVE BOX 6100 NEWPORT BEACH,CA92658 33-0676831	HEALTHCARE	CA	NA	C-CORP
(3) DATU HEALTH INC 16150 MAIN CIRCLE DR SUITE 250 CHESTERFIELD,MO63017 46-3070062	IT SVCS	DE	NA	C-CORP
(4) HOAG MANAGEMENT SERVICES INC 1 HOAG DRIVE BOX 6100 NEWPORT BEACH,CA92658 33-0731587	HEALTHCARE	CA	NA	C-CORP
(5) LUBBOCK METHODIST HOSP PRACTICE MGMT 2107 OXFORD STREET STE 300 LUBBOCK,TX79410 75-2578995	INACTIVE	TX	NA	C-CORP
(6) LUBBOCK METHODIST HOSPITAL SVCS PO BOX 1201 LUBBOCK,TX79410 75-2118585	HEALTHCARE	TX	NA	C-CORP
(7) MISSION VIEJO MEDICAL VENTURES 27800 MEDICAL CENTER RD 354 MISSION VIEJO,CA92691 33-0212905	HEALTHCARE	CA	NA	C-CORP
(8) ST JOSEPH HEALTH 3345 MICHELSON DRIVE SUITE 100 IRVINE,CA92612 46-2340232	HOLDING COMPANY	CA	NA	C-CORP
(9) ST JOSEPH HEALTH SOURCE INC 3345 MICHELSON DRIVE SUITE 100 IRVINE,CA92612 46-1900168	HEALTHCARE	CA	NA	C-CORP
(10) ST JOSEPH PROF SVCS ENTERPRISES INC 3345 MICHELSON DRIVE SUITE 100 IRVINE,CA92612 33-0155323	HEALTHCARE	CA	NA	C-CORP

Schedule R (Form 990) 2015

Page 3

Part V

Transactions With Related Organizations Complete if the organization answered "Yes" on Form 990, Part IV, line 34, 35b, or 36.

Note. Complete line 1 if any entity is listed in Parts II, III, or IV of this schedule.

Yes

1 During the tax year, did the orgranization engage in any of the following transactions with one or more related organizations listed in Parts II-IV?

a Receipt of (i) interest, (ii) annuities, (iii) royalties, or (iv) rent from a controlled entity .....................

b Gift, grant, or capital contribution to related organization(s) ............................

c Gift, grant, or capital contribution from related organization(s) ............................

d Loans or loan guarantees to or for related organization(s) ............................

e Loans or loan guarantees by related organization(s) ............................

f Dividends from related organization(s) ............................

g Sale of assets to related organization(s) ............................

h Purchase of assets from related organization(s) ............................

i Exchange of assets with related organization(s) ............................

j Lease of facilities, equipment, or other assets to related organization(s) .......................

k Lease of facilities, equipment, or other assets from related organization(s) ......................

l Performance of services or membership or fundraising solicitations for related organization(s) .....................

m Performance of services or membership or fundraising solicitations by related organization(s) .................

n Sharing of facilities, equipment, mailing lists, or other assets with related organization(s) ...................

o Sharing of paid employees with related organization(s) ............................

p Reimbursement paid to related organization(s) for expenses ............................

q Reimbursement paid by related organization(s) for expenses ............................

r Other transfer of cash or property to related organization(s) ............................

s Other transfer of cash or property from related organization(s) ............................

If the answer to any of the above is "Yes," see the instructions for information on who must complete this line, including covered relationships and transaction thresholds.

(a) Name of related organization	(b) Transaction type (a-s)	(c) Amount involved	(d) Method of determining amount involved

Schedule R (Form 990) 2015

Page 4

Part VI

Unrelated Organizations Taxable as a Partnership Complete if the organization answered "Yes" on Form 990, Part IV, line 37.

Provide the following information for each entity taxed as a partnership through which the organization conducted more than five percent of its activities (measured by total assets or gross revenue) that was not a related organization. See instructions regarding exclusion for certain investment partnerships.

(a) Name, address, and EIN of entity	(b) Primary activity	(c) Legal domicile (state or foreign country)	(e) Are all partners section 501(c)(3) organizations?		(f) Share of total income	(g) Share of end-of-year assets	(h) Disproprtionate allocations?		(i) Code V-UBI amount in box 20 of Schedule K-1 (Form 1065)	(j) General or managing partner?
(a) Name, address, and EIN of entity	(b) Primary activity	(c) Legal domicile (state or foreign country)	Yes	No	(f) Share of total income	(g) Share of end-of-year assets	Yes	No	(i) Code V-UBI amount in box 20 of Schedule K-1 (Form 1065)	Yes	No

Schedule R (Form 990) 2015

Page 5

Part VII

Supplemental Information

Provide additional information for responses to questions on Schedule R (see instructions).

Return Reference

Explanation

SCHEDULE R, PART III

IDENTIFICATION OF RELATED ORGANIZATIONS TAXABLE AS A PARTNERSHIP COVENANT LONG-TERM CARE, LP EIN: 20-5033419 ADDRESS: 4000 24TH STREET, LUBBOCK, TX 79410 HERITAGE INVESTMENT GROUP I, LLC EIN: 27-1000061 ADDRESS: 500 S. MAIN STREET, STE 1000, ORANGE, CA 92868 HOAG ORTHOPEDIC INSTITUTE EIN: 61-1588294 ADDRESS: 1 HOAG DRIVE, BOX 6100, NEWPORT BEACH, CA 92658 LUBBOCK SURGERY CENTER, LTD EIN: 75-2177401 ADDRESS: 4000 24TH STREET, LUBBOCK, TX 79410 METHODIST DIAGNOSTIC IMAGING EIN: 75-2343261 ADDRESS: 4005 24TH STREET, LUBBOCK, TX 79410 MISSION AMBULATORY SURGICENTER, LTD EIN: 33-0355575 ADDRESS: 27800 MEDICAL CENTER ROAD, STE 362, MISSION VIEJO, CA 92691 NEWPORT IMAGING CENTER EIN: 33-0191776 ADDRESS: 360 SAN MIGUEL, NEWPORT BEACH, CA 92660 SHA, LLC EIN: 75-2569094 ADDRESS: 12940 NORTH HIGHWAY 183, AUSTIN, TX 78750 ST. JOSEPH PHYSICIAN VENTURES I, LLC EIN: 45-4521884 ADDRESS: 1100 WEST STEWART DRIVE, ORANGE, CA 92868 ST. JOSEPH HEALTH SYSTEM HOME CARE SERVICES EIN: 33-0307672 ADDRESS: 1845 W. ORANGEWOOD AVENUE, STE 100, ORANGE, CA 92868-2012 ST. JOSEPH HEALTH SYSTEM HOME HEALTH AGENCY EIN: 33-0282945 ADDRESS: 1845 W. ORANGEWOOD AVENUE, STE 200 ORANGE, CA 92868-2012 THE INNOVATION INSTITUTE EIN: 90-0745066 ADDRESS: 1 CENTERPOINTE DRIVE SUITE 200, LA PALMA, CA 90623-1052 NORTH BAY ENDOSCOPY CENTER, LLC EIN: 61-1559876 ADDRESS: 1383 N. MCDOWELL BLVD SUITE 110, PETALUMA, CA 94954 MISSION VIEJO PHYSICIAN PARTNERS I LLC EIN: 47-1559873 ADDRESS: 27700 MEDICAL CENTER ROAD, MISSION VIEJO, CA 92691 ADVANCED SURGERY INSTITUTE LLC EIN: 26-2299255 ADDRESS: 1739 4TH STREET, SANTA ROSA, CA 95404

Schedule R (Form 990) 2015

Additional Data

Software ID:
Software Version:

1	Briefly describe the organization’s mission or most significant activities: TO IMPROVE THE HEALTH OF THE POPULATIONS WE ARE CONTRACTED TO SERVE. FOR FURTHER INFORMATION, SEE SCHEDULE O.
2	Check this box
3	Number of voting members of the governing body (Part VI, line 1a) ........	3	20
4	Number of independent voting members of the governing body (Part VI, line 1b) .....	4	8
5	Total number of individuals employed in calendar year 2015 (Part V, line 2a) ......	5	0
6	Total number of volunteers (estimate if necessary) .............	6	0
7a	Total unrelated business revenue from Part VIII, column (C), line 12 ........	7a	0
b	Net unrelated business taxable income from Form 990-T, line 34 .........	7b

		Prior Year	Current Year
8	Contributions and grants (Part VIII, line 1h) .........	0	0
9	Program service revenue (Part VIII, line 2g) .........	0	1,176,939
10	Investment income (Part VIII, column (A), lines 3, 4, and 7d ) ....	-19	3,034
11	Other revenue (Part VIII, column (A), lines 5, 6d, 8c, 9c, 10c, and 11e)	0	0
12	Total revenue—add lines 8 through 11 (must equal Part VIII, column (A), line 12)	-19	1,179,973
13	Grants and similar amounts paid (Part IX, column (A), lines 1–3 )...	0	0
14	Benefits paid to or for members (Part IX, column (A), line 4).....	0	0
15	Salaries, other compensation, employee benefits (Part IX, column (A), lines 5–10)	0	0
16a	Professional fundraising fees (Part IX, column (A), line 11e) .....	0	0
b	Total fundraising expenses (Part IX, column (D), line 25) 0
17	Other expenses (Part IX, column (A), lines 11a–11d, 11f–24e)....	737,025	1,751,628
18	Total expenses. Add lines 13–17 (must equal Part IX, column (A), line 25)	737,025	1,751,628
19	Revenue less expenses. Subtract line 18 from line 12.......	-737,044	-571,655
		Beginning of Current Year	End of Year
20	Total assets (Part X, line 16).............	2,718,327	3,512,691
21	Total liabilities (Part X, line 26).............	0	1,366,019
22	Net assets or fund balances. Subtract line 21 from line 20.....	2,718,327	2,146,672

Sign Here

	Signature of officer	Date

	Type or print name and title


4a	(Code: ) (Expenses $ 1,751,628 including grants of $ ) (Revenue $ 1,176,939 )
	SEE SCHEDULE O

4b	(Code: ) (Expenses $ including grants of $ ) (Revenue $ )












4c	(Code: ) (Expenses $ including grants of $ ) (Revenue $ )












4d	Other program services (Describe in Schedule O.)
	(Expenses $ including grants of $ ) (Revenue $ )
4e	Total program service expenses1,751,628

(A) Name and Title	(B) Average hours per week (list any hours for related organizations below dotted line)	(C) Position (do not check more than one box, unless person is both an officer and a director/trustee)		(D) Reportable compensation from the organization (W- 2/1099-MISC)	(E) Reportable compensation from related organizations (W- 2/1099-MISC)	(F) Estimated amount of other compensation from the organization and related organizations
(A) Name and Title
(18) BRIAN BRUENING MD........................................................................ BOARD MEMBER	5.0 .......................5.0	X		0	0	0
(19) LAKHU ROHRA MD........................................................................ BOARD MEMBER	2.0 .......................2.0	X		0	0	0
(20) SHAILI FELTON MD........................................................................ BOARD MEMBER	2.0 .......................48.0	X		0	221,615	8,321
(21) JOHN GRIGSON........................................................................ CEO	12.0 .......................38.0		X	0	679,504	29,376
(22) BRUCE LANE........................................................................ VP OF FINANCE (PART YEAR)	2.0 .......................48.0		X	0	331,318	26,025
(23) MICHAEL ROBERTSON MD........................................................................ CMO	2.0 .......................48.0		X	0	487,934	25,918

1b	Sub-Total................
c	Total from continuation sheets to Part VII, Section A....
d	Total (add lines 1b and 1c)...........	0	7,535,595	334,327

(A) Name and business address	(B) Description of services	(C) Compensation





2 Total number of independent contractors (including but not limited to those listed above) who received more than $100,000 of compensation from the organization 0

1a	Federated campaigns..		1a
b	Membership dues..		1b
c	Fundraising events..		1c	0
d	Related organizations		1d
e	Government grants (contributions)		1e

f	All other contributions, gifts, grants, and similar amounts not included above		1f

g	Noncash contributions included in lines 1a-1f:$ 0
h Total.Add lines 1a-1f.......		0

			Business Code
2a	PHYSICIAN SERVICE REVENUE	622110	1,176,939	1,176,939	0	0
b
c
d
e
f	All other program service revenue.
g Total.Add lines 2a–2f.....			1,176,939

3 Investment income (including dividends, interest, and othersimilar amounts) ..........			3,034			3,034
4 Income from investment of tax-exempt bond proceeds			0
5 Royalties...........			0
		(ii) Personal	(i) Real
6a	Gross rents
b	Less: rental expenses
c	Rental income or (loss)	0	0
d	Net rental income or (loss)......			0
		(ii) Other	(i) Securities
7a	Gross amount from sales of assets other than inventory
b	Less: cost or other basis and sales expenses
c	Gain or (loss)
d	Net gain or (loss).....			0
8a	Gross income from fundraising events (not including $ of contributions reported on line 1c). See Part IV, line 18 ....
	a
b	Less: direct expenses ...b
c	Net income or (loss) from fundraising events..			0
9a	Gross income from gaming activities. See Part IV, line 19 ...
	a
b	Less: direct expenses ...b
c	Net income or (loss) from gaming activities..			0
10a	Gross sales of inventory, less returns and allowances ..
	a
b	Less: cost of goods sold ..b
c	Net income or (loss) from sales of inventory..			0
Business Code			Miscellaneous Revenue
11a
b
c
d	All other revenue ....
e	Total. Add lines 11a–11d ......			0
12	Total revenue. See Instructions......			1,179,973	1,176,939	0	3,034

1	Grants and other assistance to domestic organizations and domestic governments. See Part IV, line 21	0	0
2	Grants and other assistance to individuals in the United States. See Part IV, line 22	0	0
3	Grants and other assistance to governments, organizations, and individuals outside the United States. See Part IV, lines 15 and 16	0	0
4	Benefits paid to or for members	0	0
5	Compensation of current officers, directors, trustees, and key employees ....	0	0	0	0
6	Compensation not included above, to disqualified persons (as defined under section 4958(f)(1)) and persons described in section 4958(c)(3)(B) ....	0	0	0	0
7	Other salaries and wages	0	0	0	0
8	Pension plan accruals and contributions (include section 401(k) and 403(b) employer contributions) ....	0	0	0	0
9	Other employee benefits .......	0	0	0	0
10	Payroll taxes ...........	0	0	0	0
11	Fees for services (non-employees):
a	Management ......	0	0	0	0
b	Legal .........	0	0	0	0
c	Accounting ...........	0	0	0	0
d	Lobbying ...........	0	0	0	0
e	Professional fundraising services. See Part IV, line 17	0			0
f	Investment management fees ......	0	0	0	0
g	Other (If line 11g amount exceeds 10% of line 25, column (A) amount, list line 11g expenses on Schedule O)	1,751,628	1,751,628
12	Advertising and promotion ....	0	0	0	0
13	Office expenses .......	0	0	0	0
14	Information technology ......	0	0	0	0
15	Royalties ..	0	0	0	0
16	Occupancy ...........	0	0	0	0
17	Travel ............	0	0	0	0
18	Payments of travel or entertainment expenses for any federal, state, or local public officials .	0	0	0	0
19	Conferences, conventions, and meetings ....	0	0	0	0
20	Interest ...........	0	0	0	0
21	Payments to affiliates .......	0	0	0	0
22	Depreciation, depletion, and amortization ..	0	0	0	0
23	Insurance ...	0	0	0	0
24	Other expenses. Itemize expenses not covered above (List miscellaneous expenses in line 24e. If line 24e amount exceeds 10% of line 25, column (A) amount, list line 24e expenses on Schedule O.)
a
b
c
d
e	All other expenses
25	Total functional expenses. Add lines 1 through 24e	1,751,628	1,751,628	0	0
26	Joint costs. Complete this line only if the organization reported in column (B) joint costs from a combined educational campaign and fundraising solicitation. Check here if following SOP 98-2 (ASC 958-720).	0

1	Cash–non-interest-bearing ........			0	1	0
2	Savings and temporary cash investments .........			-241,370	2	1,314,848
3	Pledges and grants receivable, net ......			0	3	0
4	Accounts receivable, net .............			0	4	0
5	Loans and other receivables from current and former officers, directors, trustees, key employees, and highest compensated employees. Complete Part II of Schedule L
				0	5	0
6	Loans and other receivables from other disqualified persons (as defined under section 4958(f)(1)), persons described in section 4958(c)(3)(B), and contributing employers and sponsoring organizations of section 501(c)(9) voluntary employees' beneficiary organizations (see instructions) Complete Part II of Schedule L
				0	6	0
7	Notes and loans receivable, net ....			0	7	0
8	Inventories for sale or use ........			0	8	0
9	Prepaid expenses and deferred charges ......			0	9	0
10a	Land, buildings, and equipment: cost or other basis. Complete Part VI of Schedule D	10a	0
b	Less: accumulated depreciation	10b	0	0	10c	0
11	Investments—publicly traded securities .			0	11	0
12	Investments—other securities. See Part IV, line 11 .....			0	12	0
13	Investments—program-related. See Part IV, line 11 ..			0	13	0
14	Intangible assets ...............			0	14	0
15	Other assets. See Part IV, line 11 ...........			2,959,697	15	2,197,843
16	Total assets. Add lines 1 through 15 (must equal line 34)...			2,718,327	16	3,512,691

17	Accounts payable and accrued expenses .....	0	17	13
18	Grants payable ...	0	18	0
19	Deferred revenue .........	0	19	1,366,006
20	Tax-exempt bond liabilities .........	0	20	0
21	Escrow or custodial account liability. Complete Part IV of Schedule D	0	21	0
22	Loans and other payables to current and former officers, directors, trustees, key employees, highest compensated employees, and disqualified
	persons. Complete Part II of Schedule L..	0	22	0
23	Secured mortgages and notes payable to unrelated third parties ..	0	23	0
24	Unsecured notes and loans payable to unrelated third parties ..	0	24	0
25	Other liabilities (including federal income tax, payables to related third parties, and other liabilities not included on lines 17-24). Complete Part X of Schedule D	0	25	0
26	Total liabilities. Add lines 17 through 25..	0	26	1,366,019

	Organizations that follow SFAS 117 (ASC 958), check here and complete lines 27 through 29, and lines 33 and 34.
27	Unrestricted net assets	2,718,327	27	2,146,672
28	Temporarily restricted net assets ...........	0	28	0
29	Permanently restricted net assets	0	29	0
	Organizations that do not follow SFAS 117 (ASC 958), check here and complete lines 30 through 34.
30	Capital stock or trust principal, or current funds .....		30
31	Paid-in or capital surplus, or land, building or equipment fund ...		31
32	Retained earnings, endowment, accumulated income, or other funds		32
33	Total net assets or fund balances ...........	2,718,327	33	2,146,672
34	Total liabilities and net assets/fund balances ........	2,718,327	34	3,512,691